EmailDurable goods orders fell 0.1% in August after increasing 4.1% in July. The Briefing.com consensus expected durable goods orders to increase 0.1%.
The increase in orders in July was due to a 49.9% increase in nondefense aircraft orders. As expected from the Boeing (BA) orders sheet, nondefense aircraft orders held up remarkably well in August as orders increased 23.5%.
Motor vehicle orders unexpectedly tumbled 8.5% in August, nearly wiping away the entire 10.2% gain in July. This suggests that the July motor vehicle orders were issued to replace low inventories. Supply shortages developed in the beginning of the summer as Japanese suppliers struggled to get parts to the U.S. following the Japanese earthquake and tsunami. The gains in July were not demand driven.
Excluding transportation, durable goods orders also fell 0.1% in August after increasing 0.7% in July. The consensus expected these orders to fall 0.2%.
There was a clear divergence in durables demand in August.
Manufacturing inputs such as primary and fabricated metals declined substantially at the same time. This suggests that manufacturers believe future demand for finished goods may be weak. At the same time, finished durables goods remained strong. Computers and electronic products, electrical equipment and appliances, and machinery orders all had positive growth.
Business investment rebounded as orders for nondefense capital goods excluding aircraft increased 1.1% in August after falling 0.2% in July. Shipments, which factor directly into GDP, jumped 2.8% and should provide a boost to third quarter GDP estimates.
